coolhand's Account Talk

[coolhand]

This week's NAAIM reading took a hard turn back up to a very bullish condition (from last week's neutral condition). The mean average is up about 36 pts overall. The bears turned off their shorts and have shifted to a bullish condition. The bulls remain long and leveraged and their numbers increased as well. One note of caution is that whenever there is a large shift in the mean average (bullish or bearish) there can be a short term market reaction in the opposite direction. This means there is a chance we see some weakness over the next couple of days or so. If we get that weakness, it isn't likely to last too long. Looking out more than a couple of days I would expect higher stock prices.

This is a very interesting development in the NAAIM reading. The mean average has not been this high for some time.

 

[dannyboy]

This week's NAAIM reading took a hard turn back up to a very bullish condition (from last week's neutral condition). The mean average is up about 36 pts overall. The bears turned off their shorts and have shifted to a bullish condition. The bulls remain long and leveraged and their numbers increased as well. One note of caution is that whenever there is a large shift in the mean average (bullish or bearish) there can be a short term market reaction in the opposite direction. This means there is a chance we see some weakness over the next couple of days or so. If we get that weakness, it isn't likely to last too long. Looking out more than a couple of days I would expect higher stock prices.

This is a very interesting development in the NAAIM reading. The mean average has not been this high for some time.

I REALLY like your ideas. There is time to act and a time to chill. I got out awhile ago and I am going to stay in the G awhile. Wars, etc have a fair amount to do with this, but as long as Putin is around things are tricky. We need to focus on the current situations as they are and to not be to be tied to others thinking than we’ll
be better?

 

[coolhand]

So, last week's bullish spike in sentiment among the NAAIM money mangers turned out to be a good shift in sentiment. There was a chance we might have seen some short term weakness after the initial shift, but it never really materialized (not that it had to). So, this smart money got on the same page for a change and called the direction accurately.

This week, the mean average fell a little more than 8 pts., which isn't a big shift. The reading remains bullish overall. The bears have gone 50% short now, while the bulls remain long and leveraged. There can't be that many bears with the reading still elevated as it is.

There is likely more upside to come in the days ahead given this weekly reading.

 

[dannyboy]

So, last week's bullish spike in sentiment among the NAAIM money mangers turned out to be a good shift in sentiment. There was a chance we might have seen some short term weakness after the initial shift, but it never really materialized (not that it had to). So, this smart money got on the same page for a change and called the direction accurately.

This week, the mean average fell a little more than 8 pts., which isn't a big shift. The reading remains bullish overall. The bears have gone 50% short now, while the bulls remain long and leveraged. There can't be that many bears with the reading still elevated as it is.

There is likely more upside to come in the days ahead given this weekly reading.

Thanks CH,
I really took a major hit, late last year- early this year , all due to pandemic? This gives me a little bit of time to think about this. I can gently stick a toe in cyberspace and make a good effort to watch more closely. I hope that this works out? G25C50S25
db

 

[coolhand]

Last week, the NAAIM reading dipped a bit, but remained bullish overall. The market, however, was weak since that time, but it was also due for a measure of profit taking. Remember, there was some short positions taken last week by NAAIM even as they remained bullish overall.

This week, the NAAIM reading ticked up about 2 pts, which is is not meaningful, but the bears took their short positions off and that may be a tell. The bulls remain long and leveraged.

So, the reading remains bullish and since the bears have vacated their shorts, I'd say the market may be ready to move back up again before too long.

 

[coolhand]

This week's NAAIM reading saw the mean average drop 7.67 pts, which takes it from a bullish reading to a modestly bullish reading. The bears went from neutral to 50% short (no leverage). The bulls remain steadfastly long and leveraged. So, we don't have any big changes and the picture remains about the same. The bears remain cautious, while the bulls maintain their leveraged long positions. But the market isn't making it easy to take advantage of weekly readings, but it remains notable that at least to this point it does continue to favor the bulls over the longer term (depending on the index being followed). How long it can continue to so is the million dollar question, isn't it?

 

[Scout333]

As always thanks for sharing your analysis Cool! I am beginning to be really nervous about the bullishness of this market with no real strong support! :smile::smile::smile:

 

[coolhand]

This week's NAAIM reading rose about 7 pts, which retraces the drop in the mean reading last week. This puts the reading back into a bullish condition (from modestly bullish). The bears had no change in their short positions and remain 50% short, but it looks like they picked up a few bears. The bulls remain 100% long and leveraged and they picked up some bulls, so some sideline money found its way into both the bull and bear camps this week with the bulls picking up the biggest gain, which is why the reading rose.

The market continues to make it difficult to pick your entry and exit spots, but the NAAIM smart money is still pointing higher.

 

[nasa1974]

This week's NAAIM reading rose about 7 pts, which retraces the drop in the mean reading last week. This puts the reading back into a bullish condition (from modestly bullish). The bears had no change in their short positions and remain 50% short, but it looks like they picked up a few bears. The bulls remain 100% long and leveraged and they picked up some bulls, so some sideline money found its way into both the bull and bear camps this week with the bulls picking up the biggest gain, which is why the reading rose.

The market continues to make it difficult to pick your entry and exit spots, but the NAAIM smart money is still pointing higher.

Doesn't look like the market is listening today.

 

[coolhand]

Last week, the NAAIM mean average ticked up to a bullish reading from modestly bullish the previous week. The day the reading was posted to the internet the market got whacked to the downside. At the time, many may have been questioning the validity of the NAAIM sentiment reading given the hard move down. Now, one week later the DWCPF is hitting highs it hasn't seen since last Summer, while the S&P continues ramping to the upside itself. So, once again the NAAIM reading was valid.

This week, the mean average rose a little more than 10 pts, which puts it in a very bullish posture. I note that the bears are not taking short positions at all and the bulls, who remain long and leveraged, have accumulated more bulls. This sure looks like a prescription for more upside (this is smart money) and it probably is, but as the bears continue to capitulate this market could run out of steam for at least a bit. Good luck guessing when that may happen.

 

[nasa1974]

I'll take as much upside that the bulls can hand out.

 

[dannyboy]

Last week, the NAAIM mean average ticked up to a bullish reading from modestly bullish the previous week. The day the reading was posted to the internet the market got whacked to the downside. At the time, many may have been questioning the validity of the NAAIM sentiment reading given the hard move down. Now, one week later the DWCPF is hitting highs it hasn't seen since last Summer, while the S&P continues ramping to the upside itself. So, once again the NAAIM reading was valid.

This week, the mean average rose a little more than 10 pts, which puts it in a very bullish posture. I note that the bears are not taking short positions at all and the bulls, who remain long and leveraged, have accumulated more bulls. This sure looks like a prescription for more upside (this is smart money) and it probably is, but as the bears continue to capitulate this market could run out of steam for at least a bit. Good luck guessing when that may happen.

Your insights are very valuable to me. I do hope that you will continue to post your insights.
db

 

[coolhand]

NAAIM gave us yet another good sentiment indication last week as they got very bullish and the market followed suit by rallying some more.

This week, the mean average increased about another 6 pts., which makes for an even more bullish reading. Looking at the numbers, the bears have pretty much given up and joined the bull party. This reading, like last week's reading, seems to predict more upside yet to come in the week ahead.

This melt-up could go on for just a few more days, or it could be weeks to months. It is not very predictable, so remain vigilant and enjoy the rally while you can.

 

[FireWeatherMet]

NAAIM gave us yet another good sentiment indication last week as they got very bullish and the market followed suit by rallying some more.

This week, the mean average increased about another 6 pts., which makes for an even more bullish reading. Looking at the numbers, the bears have pretty much given up and joined the bull party. This reading, like last week's reading, seems to predict more upside yet to come in the week ahead.

This melt-up could go on for just a few more days, or it could be weeks to months. It is not very predictable, so remain vigilant and enjoy the rally while you can.

Just wondering if in the short term (3-7 days) that means TOO Bullish...and those last Bears heading to try joining the party, end up opening the "Exit Door" for those who've been in the party all along and now leaving for the exits...catching a cab for the safety of home...to catch a good nights sleep, then see what new party is scheduled tomorrow night.:fest30:

Without giving away any "decision parameters" regarding what our own TSPtalk Sentiment Survey says...the level of bullishness was VERY high...pretty much at a high for 2023 (below...survey polling was at the end of last week).

 

[coolhand]

Hello FWM,

I have indicated in previous posts over the years that the NAAIM reading can see short term reversals, but generally it's when there is a big sentiment move in NAAIM and not a modest one like this week (and even then the reversal is often short lived). I use NAAIM as my only sentiment measure because they are smart money and I have long since developed a healthy respect for their uncanny ability to get it right a great deal of the time. They are smart money for good reason and it is usually because they are connected and they also know how this game is played (by the whales). They know how sentiment works too, so why should we second guess them?

When this was a bull market (not sure if we have one now or not anymore), the sentiment readings across many surveys were quite bullish for months on end. And still the market rallied.

Most of us have heard that the market can remain irrational far longer than we can remain solvent. I don't know that I'd say the market is irrational just yet, but remember that Alan Greenspan coined the term "irrational exuberance" back in the 1996 and it would be several years later before the market peaked. I can't imagine we'll see anything close to that kind of sustainment, but even if it's another few months it would be quite an upside run.

 

[coolhand]

The latest NAAIM reading give us more of the same in recent weeks as the mean average rose almost 3 pts. It can get higher still, but not by a lot. The numbers show that they are heavily bulled up with leveraged long positions. There is a small short position shown in the readings this week, but that is likely some risk spreading happening there. So, this reading suggests more upside over the coming days.

 

[coolhand]

Fitch's downgrade of the US is likely going to caused some measure of portfolio adjustments among the NAAIM money managers. Since they were pretty bulled up last reading, I suspect we'll see some measure of a defensive reaction. Not necessarily a big one, but I would expect their bullishness to drop at least a bit. It will be interesting to see what the reading is tomorrow and how they reacted to the downgrade.

 

[coolhand]

As I mentioned yesterday, I was looking for a portfolio adjustment from NAAIM in the bearish direction as a result of the Fitch downgrade on the US outlook; though I didn't know how much of a shift we might see. Well, the latest NAAIM reading shows the bears not only put on some shorts, but they went fully leveraged too. Having said that, the shift in sentiment, which saw the mean average fall about 23 pts, remains bullish overall. The bulls remain long and leveraged and in much bigger numbers than the bears (which is why the average remains bullish).

So, I would say we see more weakness first, which is what we are seeing, but the selling may not last all that long. We do want to be on guard though, for a change in market behavior over the longer term.

 

[WorkFE]

So, I would say we see more weakness first, which is what we are seeing, but the selling may not last all that long. We do want to be on guard though, for a change in market behavior over the longer term.

News moves faster than we can read it and the market can flip twice as fast. Keep your guard up and some dry powder available at all times. No hitting below the belt.

 

[coolhand]

It was posted late today, but NAAIM finally got around to posting this week's survey. It shows the mean average falling another 13 pts, which puts it into the upper range of a neutral stance. The bears took off their leveraged shorts and are now just fully short. The bulls remain fully long and leveraged. So, given the bears backed off their leveraged shorts and the bulls remain committed to the leveraged long side, I believe the downside may be getting near at least a short term bottom. But the reading is neutral overall, so this market could remain volatile and keep both sides guessing to some degree. I am wary of a change in market character that may not give us a lot of time to recognize it before a bigger move occurs (in either direction). I refer to what WorkFE said in the previous post.